sanity check reminder

[shipwreckedandalone]

  It's a good sanity check for retirement portfolios that choose to utilize a large number of funds to benchmark against a standard equity/bond index allocation that matches your portfolio allocation. M* X Ray is good. My work over the many years has shown as the portfolio broadens (more and more funds) it becomes increasingly difficult to outperform a simple index. Even if they are a combination of perceived all star funds. Sometimes the obvious is not so obvious. Do your own due diligence here. If you have a watch list, you might add the desired index to your daily watch list and monitor daily returns for correlation or lack thereof.

[uncleharley]

A useful guide to sanity is to calculate or estimate the number of good ideas one might have at one time and limit the number of positions in your portfolio to that number.

[steelpony10]

           shipwreckedandalone,

                       It’s an accepted fact that a vast majority of professionally managed mutual funds don’t beat their index. Also as far as generating max returns amateur investors trail professional investors, market timers being near the worst.

                        These facts should point amateurs at the very to invest in the indexes they and a major of professionals can’t beat over time.

                        Anything short of that, again if one invests for a maximum return with some type of fund  only, is insanity because facts overwhelmingly support it can’t be done.

[steelpony10]

Aug 9, 2021 17:29:51 GMT steelpony10 said:

  shipwreckedandalone ,uncleharley ,

                It’s an accepted fact that a vast majority of professionally managed mutual funds don’t beat their index. Also as far as generating max returns amateur investors trail professional investors, market timers being near the worst.

                 These facts should point amateurs to invest in the indexes they and a major of professionals can’t beat over time.

                  Anything short of that, again if one invests for a maximum return with some type of fund  only, is insanity because facts overwhelmingly support it can’t be done.


                   Now if one doesn’t care about any of the above the field is wide open and full of opportunity to grow weeds which it seems many choose to do. 

 

[paulr888]

Aug 9, 2021 17:30:48 GMT steelpony10 said:

Aug 9, 2021 17:29:51 GMT steelpony10 said:

  shipwreckedandalone ,uncleharley ,

                It’s an accepted fact that a vast majority of professionally managed mutual funds don’t beat their index. Also as far as generating max returns amateur investors trail professional investors, market timers being near the worst.

                 These facts should point amateurs to invest in the indexes they and a major of professionals can’t beat over time.

                  Anything short of that, again if one invests for a maximum return with some type of fund  only, is insanity because facts overwhelmingly support it can’t be done.


                   Now if one doesn’t care about any of the above the field is wide open and full of opportunity to grow weeds which it seems many choose to do. 

 

I don't follow the above.  I want a portfolio to yield 4%.  My bond OEFs and CEFs are all actively managed.  In'tl and EM , I am not comfortable with indexing.  Then my REITs, BDCs and HQL are not index.  Then my long/short commodities, FNV and other commodities are not index.  All that is left is about 15% PV in Large Cap domestic.  I have 6 such funds, all actively managed and doing well.  I have searched for index funds on occasion in past and none did better than what I had.  Am I lucky?  I doubt it.  Just another perspective that one size does not fit all.  And just because we don't subscribe to the so called "obvious wisdom" does not make us insane or stupid.  

[steelpony10]

         paulr888 ,

                    Yep the field is wide open to do something else. I was commenting on the sanity check reminder. Basically my choice is to follow what’s held as common wisdom trying to make the most I can with little tinkering on my part. Little diversification or allocation and no brainer indexes has produced top market results also. Little of it due to my efforts. It always seemed like an easy problem to solve.

                     I buy and hold CEF’s and use them also to fill in the monthly gap, in addition to SS, in excess to what we need. So a pension, annuity like holding. Which solves that problem. Personally I chose growth indexes, a core index and a muni to hold the excess. All in case I pre decease my wife. CEF’s are pretty obscure. Indexes as backup should solve the problem if one has no interest or skills and cashes all CEF’s in. In that event this would eventually leave just VTI and a muni fund plus cash with little oversight required.